Jul 1, 2025

SHARE SUMMARY The Indian startup ecosystem saw a capital infusion of over $5.7 Bn across 470 deals in H1 2025, marking a modest 8% uptick from $5.3 Bn raised in H1 2024 47% of the total funding or $3 Bn went into late stage startups, marking an 11% YoY jump Based on the current momentum, Inc42 estimates total startup funding for 2025 to be in the range of $14 Bn to $15 Bn Despite macroeconomic headwinds, investor sentiment remained bullish about the Indian startup ecosystem in the first half (H1) of 2025. According to Inc42’s Indian Tech Startup Funding Report, H1 2025 , the world’s third-largest startup ecosystem saw a capital infusion of over $5.7 Bn across 470 deals in H1 2025, marking a modest 8% uptick from $5.3 Bn raised in H1 2024. However, the funding slipped sequentially, falling about 12% from the $6.5 Bn raised in the second half of 2024. Despite a near 7% YoY decline in the number of deals, the funding numbers remained robust in H1 2025 due to a notable uptick in the number of mega deals. It is pertinent to mention that Indian startup funding during the period under review was almost in line with Inc42’s forecast of $5.8 Bn funding for business-as-usual circumstances. In an optimal situation, our analysis had projected a total startup funding of about $6.3 Bn. According to Inc42’s half-yearly investor sentiment survey, 95% of investors remain bullish on India’s startup ecosystem, citing strong fundamentals and the country’s positioning as a neutral innovation hub. Of these, 49% of the over 80 institutional investors surveyed are moderately bullish due to global headwinds, while 46% investors see the country’s startup ecosystem as a strategic innovation hub. Late Stage Funding Zooms On Mega Deal Surge The first half of the year saw 11 mega deals ($100 Mn & above rounds), surging 57% from only seven such deals in H1 2024. While the biggest cheque was raised by healthtech startup Innovacer in January , late stage startups like Zolve , Groww , Porter , also bagged large cheques. As a result, 47% of the total funding went into late stage startups, marking an 11% YoY jump. However, the number of deals fell 4% YoY to 69. Despite this, the median ticket size for late stage startups grew 47% YoY to $25 Mn. Growth stage funding also recorded an 18% YoY uptick, reaching $2 Bn in H1 2025, with the median ticket size rising 14% to $8 Mn. In contrast, early-stage startup funding took a hit, falling 31% YoY to $406 Mn. Deal volume declined 6% from the same period last year, while the median ticket size for seed stage startups remained largely flat at $1 Mn. Now, let’s look at the key funding trends in the first half of 2025: Bengaluru Bagged Maximum Funding: With startups raising $2.5 Bn across 143 deals, Bengaluru remained the ‘startup hub’ of India. Delhi was at the second spot, with startups raising $1.5 Bn across 116 deals. Funds Worth $6.8 Bn+ Announced: The first half of 2025 saw funds worth over $6.8 Bn being launched to back Indian startups. 5 Unicorns Minted: The Indian startup ecosystem saw five new startups joining the unicorn club in H1 2025 – Netradyne, Drools, Porter, Fireflies AI, and Jumbotail. Surge In M&As: The M&A deals surged 40% to 52 in H1 FY25 from 37 such deals a year ago. Sequentially, M&A deals rose 52%. Fintech & Ecommerce Continue To Be Investors’ Darlings Just as in the previous year, fintech remained investors’ favourite sector in the first six months of the year. Fintech startups raised $1.6 Bn across 68 deals during the period, marking a near 56% jump from $1.1 Bn raised in 84 deals in the same period last year. In terms of deals, ecommerce took the top spot with 109 funding deals with a fund infusion of $1.2 Bn. This marked a nearly 53% jump from $561 Mn raised in H1 2024. The uptick in funding numbers came on the back of a $250 Mn secondary deal at IPO-bound Meesho and mega equity fundraise by Spinny and Udaan . A standout trend in the first half was the rise in funding for defence tech startups operating in the advanced hardware & technology sector. These startups raised $311 Mn via 43 deals, an unprecedented surge. To put things into context, Indian hardware startups have historically struggled to attract venture funding, raising only $1.1 Bn to date since 2014, which is under 1% of the total $164 Bn raised by the Indian startup ecosystem. While Raphe mPhibr became the first defence tech startup in India to raise a mega funding round, prominent funding deals also materialised for startups like Tonbo Imaging and Sanlayan Technologies . Funding To Surge In Second Half Of 2025 Based on the current momentum, Inc42 estimates total startup funding for 2025 to be in the range of $14 Bn to $15 Bn. Under normal circumstances, investors are expected to infuse $8 Bn in Indian startups during July-December 2025. In an optimistic scenario, this number will surge to about $8.8 Bn. According to Inc42’s half-yearly investor survey, early and growth stage investors are most bullish on AI startups, which are likely to attract significant capital in H2 2025. Investor interest in defence tech is also expected to remain strong, with funding increasingly flowing into areas such as defence drones, counter-drone systems, and satellite imaging solutions.